Autonomous Tractor Market

Market Overview

The global autonomous tractor market size had a revenue holding of USD 818.4 million in 2021. It is expected to reach USD 6556 million by 2030, growing at a CAGR of 26.01% during the forecast period (2022-2030).

Autonomous tractors are driverless tractors that use modern technology to provide higher efficiency and minimize much human intervention. For the agricultural segment of the economy, autonomous tractors are the next big thing as part of their farm equipment. There are many benefits associated with autonomous tractors, such as safety, fuel efficiency, sharing, and many others. The design of autonomous tractors is nothing short of a revolution in the agricultural segment of the economy. The 'do more in less time, and fuel' concept of the autonomous tractor is the machine's most productive and effective aspect. Such farm mechanization technique saves time and labor costs, lowers crop production costs, and increments the income of the farmers and laborers in the long run. Increased focus on advanced research and innovations to develop more upgraded technologies in the machine drive the growth of the global autonomous tractor market.

Market Dynamics

Market Driving Factors

Decrease in Arable Land and Shortage of Labor

There can be seen a reduction in the area of arable land per person across the globe. This was reported by the World Bank, stating that the area has decreased from 0.20 hectares in 2011 to 0.19 hectares in 2016; this pushes the farmers to increase their production in the limited space only, which urges the farmers to move towards a mechanized way of production, boosting the use of autonomous tractors. The lack of availability of land for production pushes the growers to increase productivity per hectare of land available to meet the growing demand of the supply. Therefore, farmers move towards adopting autonomous tractors, which helps increase their productivity and return on investments.

Another factor pushing farmers to use autonomous tractors is the shortage of laborers. There was a significant decline in the industry's labor percentage, and the human resources engaged in the agricultural sector declined significantly. With less human help, farmers and farming industries have no option but to take up machines to help with the production work. This most definitely raises the demand for autonomous tractors in the industry.

Growing Population Increasing the Demand for Autonomous Tractors

The world is growing at a rate never witnessed before, in terms of technology, in terms of advancement in infrastructure, and in terms of population. Almost every day, 200,000 people are added to the world population, meaning more demand for food production to meet the hunger of the number of people. In the past years, the percentage of people in every country has increased dramatically. More people mean their demand is more. Demand for employment, demand for more food. Therefore, this increase in the need for food ultimately pushes the farmers to supply more to the market, and the productivity and efficiency of machines and machine tools are definitely more than that of humans.

Farmers deploy machines like autonomous tractors to increase their production and productivity. To satisfy the market's growing demand. The increased number of people pushes the food and farm industry to produce more and increases the need for food security. The present system of growing, marketing, and distributing food among the population is not efficient or effective, which leads to greater scope for the autonomous tractor market.

Market Restraining Factors

Slow Adoption of The Autonomous Tractor in the Industry

Although the autonomous tractor holds high potential and capabilities in the agricultural segment of the market, it still accounts for a significantly lower percentage in the farming industry. The high cost involved, with insufficient time for the farmers to adopt the emerging technology, results in the non-adoption of the technology. It requires large sums of capital investment to build autonomous equipment and high labor skills to operate the machine.

The maintenance of autonomous tractors is also relatively high. These factors are generally in short supply on the local and small farms. Thus, small-scale farmers fall behind in utilizing the autonomous tractor's benefits. The local and small-scale farmers need a reliable and capable workforce to help them operate and maintain the autonomous machine. This creates restraints for the global autonomous tractor market share to grow and reach local farms; there is low availability of labor in the segment, such as laborers that possess the skills and technical expertise to operate on autonomous machines, creating restraints in the market.

Fragmented Land Holdings

The average land holding size has decreased considerably over time; such a continuous sub-division of the land reduces the efficiency of agricultural production, threatens food security, and creates optional issues concerning agricultural machinery. Smaller land holding means smaller space for farm production and activities, which ultimately restricts autonomous tractors' movement. This, in turn, lowers the demand for autonomous machines in farming applications.

The fragmentation of agricultural land prominently affects the productivity in agriculture and destroys the economic opportunities available for farmers to invest in modern technology like autonomous tractors. Such a decline in agricultural land holding, especially in developing and under-developed countries, affects the demand in the global autonomous tractor market.

Market Recovery Timeline and Challenges

The stringent governmental norms implemented by the government because of the coronavirus positively impacted the autonomous tractor market. However, a few bottlenecks still had to be taken care of. Because of scarcity in the workforce, the farmers and companies chose to operate depending on autonomous tractors to increase their production level and produce for the market during tough times. Investments of massive amounts started growing around the market of autonomous tractors, and innovations in agricultural technologies that could ease the issues of labor deficiency led to higher demand in the global autonomous tractor market. The impact caused by covid has positively impacted the market for autonomous tractors. Even after the upliftment of the restrictions and social distancing norms, farmers still prefer using effective and efficient autonomous farm machines for their family activities.

Regional Analysis

The regional segmentation of the Global Autonomous Tractor Market includes North America, Europe, Asia-Pacific, South America, and Africa.

The Asia Pacific and North America are likely to dominate the regional market

The Asia Pacific will hold the largest share in the autonomous tractor market during the forecast period, growing at a CAGR of 26.6%. The region has some player countries participating in agricultural practices and promoting the market demand for autonomous tractors. China and Japan have the largest share among the countries in the region. China has focused on using autonomous tractors in its farming practices to enhance productivity and overcome the labor shortage. The government is also rapidly improving farm mechanization to produce crops like oilseed, cotton, rice, wheat, sugarcane, etc. Japan is a country that is majorly involved in agricultural and fishery production. Japan's autonomous tractors are known for their swift quality and compact sizes and ensure the users with the best functionality and usability. This urges the demand for autonomous tractors to rise significantly.

North America will likely have a shareholding of USD 1,833 million, expanding at a CAGR of 27.25%. The US is among the largest markets for autonomous tractors across the North American region. Factors that drive the market of the autonomous tractor in the area are the large-scale farming operation in the country, the gradual decline in the workforce, and the constant need to enhance agriculture productivity. Companies are introducing new autonomous tractors in the United States to expand their market share. For instance, Monarch Tractors introduced a 40-horsepower fully electric smart autonomous tractor in April 2021 to support more efficient and sustainable farming practices in vineyards.

Segmental Analysis

The global autonomous tractor market is classified based on horsepower, automation, and region.

By Horsepower Analysis

Based on horsepower, the categories are up to 30 Hp, 31 Hp to 100 Hp, and above 100 Hp.

The above 100 Hp section will likely hold the largest market share, growing at a CAGR of 24.82%. An autonomous tractor with high horsepower means that the machine's performance will be stronger and swifter, with the ability to cover a larger area of harvesting. Large farms and companies owning big-scale farming lands generally demand above 100 Hp autonomous tractors, which can perform extensively and desirably in challenging soil conditions. Such tractors have the potential to cover a more significant amount of land, perform better in extreme conditions and yield more considerable production benefits for farms operating on a large scale. Therefore, emerging countries like China, India, South Korea, and Brazil use above 100 Hp autonomous tractors for their farming activities.

The autonomous tractor from 31 Hp to 100 Hp is expected to hold the second-largest share. Factors owing to increased demand for 31 Hp to 100 Hp autonomous tractors are generally the large-scale usage of the machine and equipment in rough soil conditions and use in non-agricultural segments like construction and infrastructural development.

By Automation Analysis

Based on automation, the autonomous tractor market is classified into Semi-Automated and Fully Automated.

The semi-automated section is expected to hold the largest market share, growing at a CAGR of 26.10%. Autonomous tractors allow farmers to automate their operations while enabling precise work control and efficient farm equipment utilization. With advancing technology in the farming sector, the demand for autonomous tractor is also gradually increasing. The need is being driven by the demands of the expanding population, rising food demand, the requirement to boost crop yields, and a rise in productivity.

The fully-automated section will hold the second-largest share. By doing away with the requirement for a tractor driver, the development of entirely autonomous tractors directly addresses a problem at the farm level, namely the acute and ongoing issue of labor shortages on grain and oilseed farms in places like western Canada.

Impact of covid-19

When the world witnessed the noble Coronavirus breakout, it disrupted all nations' economies. The government imposed lockdowns to slow the disease's rapid spread. Productions were stopped, all workplaces were closed, public interactions were limited, and temporary manufacturing and trading operations suspensions were implemented globally. Implementing the lockdown and public exchange caused interruption causing a cutting down of the market's operations. The social distancing norms of the government also disrupted the supply chain. Because of lockdowns imposed by the government, businesses and employees could not use the equipment. This forced the farmers to lean towards the help provided by autonomous tractors pushing the autonomous tractor market growth further.

The South Korean nation faced many problems due to the social distancing and public interaction restrictions imposed by the government, which resulted in a workforce shortage. Travel restrictions imposed also restricted the movement of emigrant laborers into the nation. So the country had to ultimately shift towards using autonomous machines to continue their production and operations, to generate income during tough times. But still, during the era of covid, the market had to face a few bumps, such as the level of participation by the companies in the market declined, suppliers and distributors also slowed down their operations, and this negatively affected the farm machinery industry supply chain, resulting in a delay of deliveries of agricultural machinery.

Recent Developments

• 2022, during the press release at CES, John Deere revealed their fully autonomous tractor, which is ready for production.
• March 2022, Mahindra’s farm equipment sector sells 28,112 units in India
• CNH plans on bringing a significant number of autonomous equipment by 2025, making the farm industry automated.
• April 2022, Yanmar’s flagship X47 Express Cruiser received the iF Design Award 2022.
• AGCO’s Fendt® to display innovation solutions at 2022 Commodity Classic